Tips on Understanding the Financial Stability of Your Banking Partner

Jared Bauck - Tuesday, July 22, 2014

As a community banker, one of our primary goals is providing our customers (and community) a financially stable and secure place for their banking needs. With every loan, deposit account and online banking login, we are earning the trust our customers have placed in Astra Bank.

Recently while catching up on some reading, I came across an interesting article that talked about some of the ways consumers can better understand the financial well-being of their bank. In the banking industry all of our numbers are public information, so we don’t have any secrets. You can look up our numbers, as well as any other bank directly on the FDIC’s website.

The two metrics mentioned in this article were Return on Equity (ROE) and Net Interest Margin (NIM). When compared to the national averages for ROE and NIM (8.99% and 3.17% respectively), I’m proud to say that Astra Bank stacks up very well. Our ROE is a healthy 13.31%, well above the national average and our NIM is also above average, coming in at 3.67%.

So what’s this really mean? Well, our ROE performance means we are able to turn the equity that is maintained in the bank into revenue better than other banks in the industry. Additionally, our NIM shows us that the rate difference between our interest-generating assets (loans) has a better spread over what we are paying for funding (such as our deposits and other liabilities).

While we certainly are proud of the fact that we’re “above average” in these two metrics, there certainly are other tools to help measure financial health of a bank. Two of the popular performance-ranking sites for consumers are Investigative Reporting Workshop’s BankTracker and BauerFinancial. BankTracker measures the amount of “troubled assets” a bank has, and you’ll see by visiting the site that we’ve got less than industry averages – a testament to our sound lending guidelines. Additionally, we’re proud to have received an Excellent 4-star rating from Bauer, further reinforcing that ours is a solid and healthy bank. To read the full Bauer Financial report, be sure to search for “Astra Bank” on their Find Your Bank page.